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The Government Is Looking for Consumer Input To Tighten Debt Collection Law

The following article is written by Michelle Singletary of the Washington Post. The Consumer Financial Protection Bureau is looking for your input in making debt collection laws even tougher.  If you would like to share your input or suggestions, visit

WASHINGTON — If you owe a debt, you should make every effort to pay it. After all, you’ve enjoyed the services or goods that your debt bought. And companies have a right to try to collect or even sell that debt to recoup their money. The more they can collect, the less likely they are to pass on their debt troubles to other consumers in the form of higher prices or the cost of credit.

But consumers have a right to accurate documentation to back up the collection efforts. And certainly folks who don’t owe a debt shouldn’t be harassed or bullied because of some computer error or faulty debt data.

And this is where the Consumer Financial Protection Bureau comes in. The watchdog agency is considering rules for the debt collection market, but before it writes any new regulations or strengthens those already on the books, the agency wants the public to weigh in on an array of issues involved in debt collection.

Among the agency’s chief concerns is making sure debt collectors have the correct person, debt and documentation.

“It is widely recognized that problems with the flow of information in the debt collection system is a significant consumer protection concern,” the agency said in its advanced notice of proposed rule-making.

Often when debt is sold to collectors for pennies on the dollar, the sale doesn’t include a lot of information about the debtor or his or her debt. The documentation might include nothing more than the person’s name, last known address, Social Security number and debt amount. Several states have implemented new laws, court rules or administrative orders requiring more specific proof of debt from companies who sue consumers to collect on outstanding debts.

Even ACA International, a trade group for the consumer debt-collection industry, believes some updating is in order.

“Current federal debt collection laws are woefully outdated when it comes to areas such as communication, documentation, verification and statutes of limitations,” ACA said in a statement. “We agree that modernizing the nation’s consumer debt collection system is important so long as changes are based on common-sense solutions that preserve balance between consumer protection and the ability of a creditor or debt collector to lawfully recover debts.”

Collectors have a limited number of years in which they can sue someone for payment. After the time runs out, unpaid debts are considered “time-barred,” meaning that collectors can contact you about the old debt but not seek a remedy through the courts.

You may not have the inclination to read the CFPB’s 114-page rule-making proposal. I wouldn’t blame you. It’s pretty dense and includes nine parts with 162 sets of questions about debt collection. Yet the first set of questions in the proposal gets to the heart of this issue for consumers, which is what information is transferred during the sale of debt or the placement of debt with a third-party collector and whether the information transferred varies by type of debt (e.g., credit card, mortgage, student loan, auto loan).

Other questions ask whether the length of time that debt collection records are retained should relate to how long a debt may generally be noted in a consumer report or how long a consumer has to bring private action under the Fair Debt Collection Practices Act, which was enacted in 1977.

I think the core of any rule proposal has to require that when debt is sold or transferred, it should include specific and standardized proof or underlying documents related to someone’s debt as part of the sale.

Consumers can submit comments at But a far easier place to learn about the issues and problems with debt collection is, which is not a government-run site. Instead, trained students and staff at Cornell Law School run it. The CFPB is working with Cornell to make it simpler for people to submit comments about debt collection.

Even if you aren’t interested in commenting, you can learn a lot about debt-collection practices and your rights. In discussion forums, people can submit comments and moderators keep things civil and provide background information. They also probe, asking follow-up questions to those who submit comments or gripes in order to dig deeper into the issues they face.

Comments submitted at will be summarized and submitted to the CFPB before the end of the official public comment period.

I know you may not think you have a voice. But you do. Here’s your chance to put in your 2 cents’ worth. What’s been your experience with debt collectors? What changes do you think should be made? Don’t be a spectator in this debate about debt.

Comments 8 Comments

  1. Thanks to take my voice on your forum.

    I got surprisingly Maryland Judgment Suspension Notice dated 11/4/2013 of my driving privilege as a result of debt collector (attorney) mailing them judgment which is motion denial on 6/24/2009. I contacted the Law Office and got copies of the case. The facts of background of this case are that I bought a tow truck in my name and given to my son rather gifted to him when paid off. My son was doing business in his name. While carrying a car on the tow truck of customer for its engine repair to workshop its headlight was broken which was replaced and the car was delivered to repair shop.
    The customer got money from her insurance. The Insurance sued me for recovery of money and their attorney got absentia judgment being motion denied.

    Is MVA can take suspension action against me when it was not a traffic road side accident as mentioned by MVA.
    The MVA has been told the whole story but still they need something from the court to clear me. Should I go against the debt collector or MVA for this unfair and wrongful action.

      Comment by M.A. Mian on November 20th, 2013 at 7:30 am

    • Sallie Mae called me thanksgiving morning on a past due bill. Is this allowed?

        Comment by Eileen on December 8th, 2013 at 8:11 pm

      • In 2010, I received a statement from a company who Capitol One sold an old credit card debt to, from 2004, saying they now hold that account from Capitol one. It was my understanding that company was actually part of Capitol One itself. The next thing I know, I either got a letter from court or that company telling me that a judgment had been won against me in this case and I needs to pay some other company in Chattanooga over $2000. I tried settling this account several times in 2004 for $380 when te debt was with the first collection agency called Vanru and the amount owed was under $500. But when I called Vanru, I was switched from rep to rep, told I would be called back and no one did, told they had to get approval from Capitol one and to call back but when I did call back I had to explain the whole thing all over again, then the cycle repeated with transfers from one rep to another, being told they will call me back. When someone did call back they say they had no knowledge of a settlement offer from me and insisted on the whole $480 which due to losing my job I couldn’t afford to pay. Now a new company has taken over and still after all these years, trying to collect on this debt. I live in Tennessee and surprised they can keep doing this when the statute of limitation ran out at 6 years. What can I do to stop this. Also, there is another collection from another company. In 2007, I purchased a vehicle that unfortunately, less than 4 months later my husband died in in an accident. That was Dec 2007. Last payment was November of 2007. I tried working with the company to get that paid but for the monthly payment to be lowered due to the one income. This went nowhere. After several attempts I gave up on it cause there was no more money to try to pay them, though I tried . The last communication with them was March 2008. Now, last week, I was informed by the new collection company that they are trying to collect inn this debt
        what can be done about this?

          Comment by Brenda on June 10th, 2014 at 1:58 am

        • In my opinion, I agree that businesses need to be able to collect on debts owed them. But if they had the right people working for them with the capacity to have some level of compassion and try to work with the customers, the businesses wouldn’t have to keep transferring or selling debts across the country to collect on them. While I think it is true that there are people who will try to get out of paying their debts, there are many many more who genuinely want to pay their debts. Unfortunately, too many customers have to deal with businesses who put the wrong people in charge of collecting and that becomes a lose lose situation for the customer and the business.

            Comment by Brenda on June 10th, 2014 at 2:08 am

          • Questions…1) Is there a restriction as to the # of times that a debt collector may call in a 24-hour period? 2) Are there federal standards in restricting debt collectors from calling at especially intrusive (abusive) time(s) of day, for example, Monday though Thursday AFTER 9!pm local time ? or Sunday mornings before 9am? Or weekends period ? I work hard all day and then the calls start coming in while I’m trying to ‘go blank’ from those I havent yet blocked. I know these people making the calls are simply working hard on whatever hours they’re assigned, but it’s so hard NOT taking it out on them–the humiliation anger worry panic and anxiety. That’s a lot to lay on someone who’s just making a living like the rest of us. Or maybe these should be government appointments that merge skills like ‘talking someone down from a ledge’ with that of an effective book-maker for a hard sell but with a slightly softer touch. Some sensitivity training ? Perhaps a professional comedian… Thanks you.

              Comment by Katherine on January 19th, 2015 at 7:28 pm

            • I am trying to buy a home to retire in. I have worked hard and paid my way without using credit. I did buy a dwelling to live in, but it burned down. It was paid in full, but I made the mistake of not insuring. I have decided to buy a home in the country. But when I ran a credit report I found a surprise. ERC and Diversified have me owing $541.00 each, for a total of $1,082.00 I have never heard of these companies, nor do I owe any such amount. I am at a total loss as to what the next steps should be. Life is hard enough without scammers!

                Comment by Sammie Frederick on November 16th, 2016 at 4:41 pm

              • I believe that if the original creditor has the right to write off the debt as ‘uncollectible’ ( which means it is paid for by my and your taxes, they should not be allowed to resell it, or at most the company they sell it to should not be allowed to collect more than twice what they paid for it. This would make the original creditors more willing to negotiate a fair settlement. And it would shut down the junk debt buyers. Why should I pay a junk debt buyer $500 for a $500 debt that was bought for $50 ? I would give them $100, which is a fair profit for them, and allows me to pay it off and the original company gets a write off. Everyone wins

                  Comment by Tom on July 6th, 2018 at 4:03 pm

                • Tom:

                  You should not pay a junk buyer ANY money. Ever. Not fifty dollars. Not five dollars. They can NEVER fully prove they bought ANY single specific debt. Why? Because the seller never provides to the buyer with the two individual affidavits PER ACCOUNT being sold. What’s worse is that the purchase and sale agreements these companies use are chock full of disclaimers that release the seller of liability; disclaimers that say – among other things – that the account information being acquired by the buyer may, in fact, be inaccurate or uncollectable or protected under a bankruptcy, etc. The seller makes clear that the account balance does not reflect payments that may have been made.

                  What does this mean? When the buyer turns around and makes specific representations to the consumer and to credit bureaus about the purported debt, those representations are actually misrepresentations. Why? Because things they are stating as facts are things they are actually uncertain about.

                  This is actionable. That’s right. The affected consumer can initiate legal action against any debt buyer who has contacted them and/or a credit bureau alleging the consumer owes them any money. Yep, even one time. Misrepresenting facts to extract money from someone is a deceptive and unfair business practice. It’s illegal. But it is one of those things the consumer has to be proactive and act on themselves.

                  The consumer needs to know how to extract a few pieces of important evidence from the debt buyer prior to initiating their lawsuit. They also need to know how to make a settlement demand from the debt buyer, which is another important step prior to initiating a lawsuit. And they need to know what the lawsuit needs to include. OR they need to know someone who knows all that stuff.

                    Comment by Jim Aitkins on December 19th, 2018 at 4:15 am

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